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Investment Spotlight
DISRUPTING THE EIS SECTOR
Ian Warwick of Deepbridge Capital is working with advisers to create innovative
products and tells Neil Martin about disrupting the industry
Deepbridge Capital has set out to be a different type
of investment manager, focusing on innovation and
designing products with advisers and investors in mind.
Ian Warwick, Chief Executive of Deepbridge Capital,
already had success as an entrepreneur and has led both
private and public companies, including the turnaround of
several businesses.
He wants to use his experience to help create new
investments in highly specialised areas.
“We work closely with financial advisers and investors to
design innovative products, ranging from investment in
technology growth companies to asset-backed renewable
energy projects,” he said.
“We also partner with innovative and committed
management teams to help UK based companies
realise their potential and become successful leadingedge
businesses.”
For Warwick, EIS is not a tax-focused product but a yearround
investment opportunity.
“We’re business builders; we drive business growth. Tax
relief is an added bonus,” he said.
Deepbridge specialises in investing across three primary
sectors: disruptive technology, life sciences, and renewable
energy. It believes that it is crucial that the investment
manager has suitable skillsets, sector expertise, and
industry experience to understand and navigate the
sector-specific routes to commercialisation and growth, to
unlock investor returns.
“The UK has a history of innovation stretching over
the last three hundred years, and retains its global
position at the forefront of technological innovation.
Such innovation requires private equity funding as well
as continued governmental support. In addition to
funding, entrepreneurs and innovators often also require
commercial experience to progress a great idea to
commercial viability,” he said.
“Both the technology and life sciences sectors are heavily
reliant on venture capital in order to undertake research,
development and commercialisation. The management
and practical support Deepbridge can provide investee
companies is also crucial to helping companies reach
their potential.”
For advisers, EIS investments are a great way to diversify
portfolios and Warwick said there is increasing demand for
alternative investments.
“As long as a client has an appropriate attitude to risk and
accepts the potential for capital loss, EIS investments can
form an integral part of a well-balanced and diversified
portfolio,” he said.
“With significant erosion of tax reliefs available for pension
savings, there is an increasing appetite amongst financial
advisers for other tax-efficient investment opportunities.”
He went on to say that with the EIS market maturing and
becoming increasingly transparent, advisers have never
been more empowered, had more product choice and
more information regarding EIS investment opportunities.
For suitable investors seeking a longer term investment,
EIS could be appealing as the investment risk is partly
mitigated by the tax reliefs available and the growth
potential of SME investments can often far exceed more
later-stage mainstream opportunities. Therefore, he said,
it is reasonable to suggest that EIS investing should be
considered as part of a well-diversified portfolio and a
wider financial plan.
Warwick also has clear views as to how advisers can
educate their clients about the investment opportunities
in EIS.
“Tax planning is a fundamental component of any financial
investment plan and consideration should be particularly
given to where the client has a specific income tax liability,
capital gain, or a potential IHT problem,” said Warwick.
“Where EIS investments may support a wider financial
plan, the financial adviser should consider suitability
and appropriateness of the advice beyond just whether
an EIS proposition is suitable from a tax planning
perspective. That is, advisers should also consider the
underlying investment and the appropriateness for the
individual client.”
EIS Yearbook 2016/17
53